How to save up $5,000 even when in debt

How to save up $5,000 even when in debt

Being in debt is stressful and it usually feels like you can’t do anything with your money until you pay it off completely. Well, not necessarily. There are ways for you to grow your money.

You can pay off your debt and still save money at the same time. As a matter of fact, you can save up to $5,000 within six months while still carrying debt. Here are some pointers for you to keep in mind:

Keep track of your money

You don’t need to track every single transaction you make, because that can be tedious. There is a simple way to keep an eye on your money. 

First, figure out what your monthly income is. Once you have that number, determine what your fixed expenses are. These are usually housing, utility bills, food and transportation. So your income minus your fixed expenses will give you a certain number. 

Now all you have to do is divide that number into weeks of the month (which, in fact, are 4.28) and you will get to your weekly “free” money. So now you can decide whether to put into a savings account or to pay other expenses.    

Save first

Every budget is different, so you need to customize it. Divide your “free” money into savings and spending. There’s no correct number when it comes to savings, but as a general rule: the more, the merrier. If you manage to save $200 a week, you’ll have $5,000 after 6 months.

Make a weekly budget

Break your monthly budget into a weekly one. A good way of doing this is by starting it during weekends, so don’t run out of money but the time Friday is here, but on the contrary: you can enjoy yourself during the weekend and then mind your spending from Monday through Friday.

It is important to feel that you can spend money wisely, so you don’t feel deprived.

Pay off debt or build an emergency fund?

So, with all the money you are saving now, you should decide whether to pay off your debt or put it in an emergency fund. Ideally, you should always have an emergency fund should something happen. Otherwise, if you have an emergency, you might fall in debt even more so.

This weekly planning may help you to consistently save money without feeling stressed out. Also, you will quickly see how your money piles up and it will keep you motivated.

Related Articles

More News

More News